Tag: Cuatro torres

Neinor, Dospuntos & Aedas Invest €5,000M In Homes

26 January 2017 – Cinco Días

The fund Castlelake is backing the same market as the funds Lone Star and Värde Partners by resuming construction of new homes. Between the three of them, the US entities have now invested almost €5,000 million in the sector. The latest player to join the party has created the company Aedas Homes, with a land portfolio worth €1,000 million and the capacity to construct 12,000 homes. (…).

Castlelake has been purchasing land in Spain since 2013, when the property crisis was more acute and few international investors were interested in the real estate sector in Spain. In the end, the fund has created an independent company to construct its homes, into which it has placed 1,350 million m2 of land. 90% of those plots are ready to be built on (with permits) and the firm’s strategy is to continue buying.

For this operation, the fund has been advised by Merlin Properties, which is listed on the Ibex 35. The heads of the fund were looking for a recent real estate success story that did not present any conflict of interest – the Socimi is not involved in the residential sector –and so they asked its directors for help. Moreover, of the 45 people that work for the new company Aedas, seven come from the Socimi, specifically, from the former Testa (acquired by Merlin in 2015), given that they had experience in residential development at the now extinct Vallehermoso.

Castlelake is a firm from Minneapolis that manages €8,600 million in assets around the world. (…).

The new real estate company’s plans

Aedas – the name has Latin roots, stemming from the word to build – will construct homes in seven provinces: Madrid, Barcelona, Alicante, Valencia, the Balearic Islands, Málaga and Sevilla. “We are committed to the areas where there is clear residential demand”, said David Martínez Montero (pictured above), Director General at Aedas. Martínez Montero previously led the Operación Chamartín project between 2013 and 2016, the Valdebebas Compensation Board and the Cuatro Torres project in Madrid.

The new company is going to launch 14 developments to construct 1,000 homes, with the aim of finishing them by the end of the year and handing them over between 2018 and 2019. These homes will be located in Madrid (capital, Boadilla and Las Rozas); Barcelona (Hospitalet, Sabadell and Vilanova i la Geltrú); Sevilla (in the capital and in Dos Hermanas); Valencia (capital and Denia); and Estepona (Málaga).

Aedas is not proposing a pre-determined rate of investment or committing to building a specific number of homes per year. “It will depend on how the market absorbs our first 1,000 homes. We are not going to make the same mistakes as in the past”, said Martínez Montero. The company’s strategy involves tackling the primary residential market with urban products for middle class buyers, a segment where demand exists. (…). The directors of the company believe that there is a need for new builds given that hardly any new homes have been built in the last decade.

The arrival of the funds

It is the same theory that the other funds that have burst onto the residential scene are applying. The first was Neinor Homes, owned by the Texan firm Lone Star, with the plan to invest €2,000 million in land and building homes. That company was created from the business purchased from Kutxabank (…).

The next to emerge was Dospuntos, created by Värde Partners, from the ashes of the San José Group’s real estate division, which plans to invest €2,000 million between now and 2021. (…).

Original story: Cinco Días (by Alfonso Simón Ruiz)

Translation: Carmel Drake

Torre Caleido: Villar Mir Unveils Plans For 5th Tower

11 January 2017 – El País

Yesterday, the President of Inmobiliaria Espacio, Juan Villar Mir, presented the plans for the fifth tower on the Paseo de la Castellana in Madrid, which will house the first high rise campus in the city and which will have 36 floors. He did so at an ceremony attended by the mayoress of Madrid, Manuela Carmena (Ahora Madrid) and the delegate for Sustainable Urban Development, José Manuel Calvo. The new skyscraper, designed by the studio Fenwick Iribarren y Serrano-Suñer Arquitectura, will be constructed in Madrid next to the complex known as the Cuatro Torres and will house the new headquarters of the IE University business school.

Construction of the fifth tower, which has been named Caleido, will cost €84 million. The building, which will be constructed at Paseo de la Castellana 259, will house the Instituto de Empresa (IE)’s university campus, a Quirón group medical clinic specialising in preventative medicine and sport, a shopping area and green spaces. The project, presented yesterday on the 42nd floor on the adjoining building Torre Espacio, will create 1,559 jobs during the construction phase and another 3,992 jobs once it is fully operational, according to the developer. It will be the shortest tower in the complex, at just 181m tall.

(…). The IE will occupy a surface area of 50,000 m2, with capacity for up to 6,000 students. By virtue of the lease contract that it has signed, the business school will occupy the property from 2019 onwards for a period of twenty years, extendable for another 55 years.

The total investment, including building costs, urbanisation of the plot allocated to green space, taxes and fees, will exceed €300 million. (…). The project will allow pedestrian access between the Castellana and the Monforte de Lemos thoroughfare, Parque Norte and Parque de los Pinos.

Villar Mir acquired the right to construct this skyscraper in April 2015 as the result of a public tender promoted by the Town Hall of Madrid. According to the terms set out by the Town Hall, most of the property must be used for healthcare or educational purposes, given that the plot must have a social purpose. Operation of the plot, which is owned by the Town Hall, has been granted to the company Torre Vida S.A.U. for 75 years, in exchange for an annual fee of €4 million, the highest offer of the four companies that competed in the public tender.

The Town Hall will assess, in coordination with the EMT and the Regional Transport Consortium, the requirement to reinforce and improve the transport infrastructure that supports the area, given the forecast increase in activity in the area as a result of the new building. (…).

Original story: El País (by Pelayo Escandón)

Translation: Carmel Drake

Corestate Buys Old Hall Of Residence In Madrid For €14M

16 November 2016 – Expansión

A new investor has made its debut in the Spanish real estate market. The investor is Corestate Capital Holding, a large investment fund headquartered in Luxembourg, which owns a broad portfolio of assets, mainly located in Germany and Austria. Corteste has combined forces with an investment partner to acquire a former halls of residence, located at number 42 on Calle Juan XXIII, in the Moncloa district, the heart of Madrid’s university area.

Corestate arrived in Spain last year when it teamed up with Inmobiliaria Espacio – part of the Villar Mir group – to launch a jointly owned company called Iberian Corestate Capital Advisors. In September 2015, that company announced that it is going to construct a fifth tower in the Cuatro Torres office complex in Madrid, on Paseo de la Castellana.

The owner of OHL was awarded the plot that runs alongside the four Madrilenian skyscrapers back in April, after the city’s Town Hall decided against building a Conference Centre on the site. The company controlled by Juan Miguel Villar Mir was awarded the concession, which gives it the right to operate on the land for 75 years, after it submitted the highest offer. Specifically, OHL agreed to pay an annual fee of €4 million, outbidding the second-best bid, led by Hispania and Ferrovial, who offered around €2.6 million. The Town Hall had asked candidates to submit bids for an annual fee of at least €1.9 million.

In September last year, Corestate announced that it was going to join the project through the company Iberian Corestate.

It is expected that Iberian Corestate will invest €240 million in the fifth tower project, which will involve the construction of a skyscraper that will house an IE Business School campus and a Quiron group medical centre. Corestate declined to comment on the plans for the Castellana project, but did confirm that it has purchased the Madrilenian hall of residence. According to sources in the sector, Corestate paid around €14 million for the property.

Until now, the asset acquired has housed a Spanish-Mexican secondary school – Santiago Galas de Arce. The building, which has been operating for almost half a century (44 years), will undergo a profound transformation with its new owner, given that Corestate is preparing an ambitious plan to restore the property and renovate the 4,022 m2 space, which will house 260 rooms and 302 beds.

Corestate’s idea is to demolish the existing complex and construct a new building that seeks to be one of the best equipped halls of residence in Madrid. The project will include several services such as a reception and concierge, common areas, such as a restaurant, gym and laundry facilities, as well as recreation areas in the form of patios and terraces.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Merlin & Metrovacesa Will Complete Their Merger Next Week

11 October 2016 – ABC

Next week, Merlin and Metrovacesa will finalise the merger that will give rise to the “new Merlin” – the largest real estate company in the country, with assets worth around €9,300 million. The entity will be listed on the Ibex 35 and Santander will be its largest shareholder.

“We will sign a notarial document to make the merger a reality between 20 and 23 October”, said the Chairman of the current company Merlin, Ismael Clemente, after speaking at a conference about “Brexit” organised by KPMG.

The two companies are currently finalising the integration of their management teams, personnel and property portfolios, said the man who will be the CEO of the new company, which will be chaired by Rodrigo Echenique.

Once the notarial document governing the merger has been signed, the existing company Metrovacesa will disappear, given that its office buildings and shopping centre assets will have been integrated into Merlin.

In exchange, the current shareholder banks of the real estate company will take shares in the new Merlin and will thereby become its key shareholders. Santander will be the largest shareholder of the new real estate group, with a 21.9% stake, followed by BBVA with a 6.4% stake and Banco Popular with 2.86% of the new shares.

In addition, the entities will retain their new stakes in the Socimi for the medium term at least, given that, in addition to signing a commitment to not sell their shares for six months after the merger, none of them has expressed any intention of divesting at all.

Iconic buildings

The new Merlin will begin life with a portfolio of office buildings, shopping centres and logistics centres with a combined surface area of more than 3 million sqm, worth around €9,317 million, which will generate revenues of €450 million per year.

This portfolio contains several iconic buildings, such as Torre Madrid and one of the four towers at the north of Paseo de la Castellana in Madrid.

By virtue of this operation, and in parallel to it, a new company Testa Residencial will be created, which will be the largest rental home company in the country. It will begin life with a portfolio of 4,700 homes for rent and Santander will also be its largest shareholder, with a 46% stake.

Clemente said that the firm has already filed a request to adopt a Socimi structure, with effect from 1 January 2016, with a view to analysing its eventual debut on the stock exchange.

With the final signing of the merger and the constitution of the two companies, the process that was launched in June, when the Socimi Merlin and the real estate company Metrovacesa first agreed to join forces, is now coming to an end.

Original story: ABC (by S.E.)

Translation: Carmel Drake

AEB Sells Its HQ For €10M & Moves To Torrespacio

21 September 2016 – Expansión

The change in AEB’s headquarters represents the final milestone in the transformation and modernisation process that the banking association began a year ago.

The banking association AEB will move out of its traditional headquarters (two and a half floors in a property on the Madrilenian Calle Velázquez) to move, under a lease contract, to one of the floors in Torre Espacio. The skyscraper was constructed by the group OHL and was sold to the Philippine group Emperador at the end of last year. AEB will move at the end of this year or in January 2017.

The economic operation involves the sale of the property in which the headquarters of the banking association has been located since it was founded, for an amount that market sources estimate to be in the vicinity of €10 million. AEB occupies a surface area of 2,400 sqm in that building, therefore, the sales price will amount to around €4,200/sqm. The buyer is a mutual insurance company, whose name has not been revealed, and it will have to modernise the property before leasing it out given that, although it is in good condition, it does not meet the requirements of the new tenants.

In the new location, AEB will occupy most of the 30th floor of Torrespacio, one of the towers that comprises the most modern office complex in the north of Madrid. There, AEB will occupy a surface area of 1,000 sqm, which is significantly smaller that its current headquarters, because, amongst other reasons, the office there is going to be open-plan for all employees, with the exception of the Secretary General and the Chairman, José María Roldón. This move follows a wider trend (towards open-plan offices) in the sector, implemented by BBVA at its new headquarters and a format that Santander is also planning to adopt – it wants to extend the pilot scheme that it has been trialling in its compliance department until now across the whole of its Boadilla del Monte complex. The rest of the floor in Torrespacio, approximately one third of it, will be leased for other activities, completely unrelated to the sector. (…).

Original story: Expansión (by Salvador Arancibia)

Translation: Carmel Drake

Edificio España Hotel: Baraka Negotiates With Starwood, Hyatt & Meliá

20 September 2016 – Expansión

Edificio España will not contain any homes, but it will house a luxury hotel and shopping centre. The Murcian group Baraka, owned by the businessman Trinitario Casanova, is pushing ahead with its new project in Madrid.

In July, Baraka reached an agreement with the Chinese group Wanda to buy Edificio España. The company, controlled by the magnate Wang Jianlin, will sell the Madrilenian skyscraper for a similar price to which it bought it – around €270 million, compared with the €265 million that it paid – two years after acquiring it from Banco Santander, after it ran into problems with the Town Hall of Madrid regarding the renovation of the building.

The new owner, which plans to complete the purchase of the property on 15 October, has decided to eliminate the 300 homes that were included in the original plans and construct a 22-storey hotel, as well as a shopping area, which will occupy the first three floors of the 117m tall building, which has a surface area of 76,000 sqm, according to El Mundo.

In fact, Baraka is already negotiating with several international hotel chains, including Hyatt, Starwood and Meliá, for the rental contract of the future hotel space. The new operator will replace Wanda Hotels & Resorts, the chain that Jianlin was going to open in the middle of 2019, his first property in Spain in the iconic Madrilenian building.

The Town Hall

Whilst Baraka negotiates with the hotel operators to lease more than 67,000 sqm of space, it has also made contact with the Town Hall of Madrid, filing an urban planning consultation regarding the construction work that it may undertake at the property.

The new owner must maintain the façade of the building in tact, something that went against Wanda’s plans, which sought to dismantle the façade of Edificio España “brick by brick” and subsequently reconstruct it using more modern materials.

The inability to develop his plans led Wanda to instruct the property consultancy JLL to sell the building. In the end, the Chinese group opted for the bid submitted by Baraka, and the operation will be completed next month.

Other funds were interested in acquiring this property, which used to belong to Metrovacesa before Santander, including the US fund Hines, the housing manager Domo, the real estate fund of Axa and the Philippine group Emperador, the owner of another skyscraper in Madrid, Torrespacio, located in the Cuatro Torres complex.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Emperador Wants To Completely Fill Torrespacio

19 September 2016 – Expansión

Take advantage of the improvement that the Spanish real estate sector is enjoying to increase the value of its Spanish jewel. That is the objective that the Philippine group Emperador has set itself. The company, which specialises in the sale of alcoholic drinks, erupted onto the real estate market in November with its purchase of the Torre Espacio skyscraper, measuring 235m tall and with a surface area of 60,000 sqm, located in the Cuatro Torres complex in Madrid.

Emperador fought off other candidates that have more experience in the Spanish property market, by offering Grupo Villar Mir €558 million. Ten months later, the Philippine group has launched an ambitious marketing campaign, which includes a new name (Torrespacio versus the original Torre Espacio), with the aim of achieving a 100% occupancy rate in the tower (it is currently around 85% full).

“We want to boost the campaign launched in 2015 when we saw an upturn in office rental prices in Madrid”, explains Eduardo Corral, the CEO of Torre Espacio Gestión, the company (belonging to Grupo Villar Mir) that has been responsible for managing the skyscraper since it was constructed. Its role has not changed as a result of the change in ownership. “The Emperador Group has not asked us to do anything new and although it was not included in the sale and purchase contract, our long-term management contract remains in place”, said Corral.

Prices

The managers of Torrespacio are looking for new tenants to occupy the available space, measuring 8,800 sqm, at a time when office rental prices in Madrid are experiencing a slight increase; they amount to €27.50/sqm/month in the prime office area (CBD) of the city. “We are reviewing our rents, but we are in line with market prices”, says the CEO of Torre Espacio Gestión.

The prices are well below €45/sqm/month that the first tenants paid for the same skyscraper, which is 57-storeys high. “In 2009, we started to fill the building, and we achieved a 70% occupancy rate, but in 2008, we already had preliminary rental agreements, and, despite the crisis, we have achieved an 85% occupancy rate”.

Since it was opened, the main tenant of Torrespacio has been Grupo Villar Mir, something that has not been affected by the change of owner. “Villar Mir continues its commitment to lease the property and, so do the other tenants. The next lease contract is not due to expire for three years”.

Tenants

The future tenants will not only be neighbours of Villar Mir, but also of the British, Dutch, Canadian and Australian embassies, the tobacco company BAT, Red Bull, Ubi and the Emperador group itself, which has opened its Madrilenian offices on the 28th floor of the skyscraper. “They are just finishing their move”, confirms Corral. Before the arrival of Emperador, the most recent tenant to move into the tower was the Chinese group Qbao, who moved in at the beginning of the year.

Of the available space, there is just one floor left in the top third of the building (the 44th floor), four floors in the middle section (floors 31, 29, 27 and 23) and two half floors. “We have one of the best buildings in Madrid and Europe, and the companies that move in will enjoy services such as a gym, a hairdresser, facility services, three restaurants and a chapel”.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Mastercard & Commerzbank Move Into Torre de Cristal

13 September 2016 – El Confidencial

The Cuatro Torres district is the new “City” in Madrid and is one of the areas where the leading real estate players have been operating with the most intensity over the last two years. The company chaired by Ignacio Garralda, Mutua Madrileña, fired the starting gun in February 2015, when it signed an agreement with KPMG to lease 18 floors in the Torre de Cristal, a third of the entire building, in an operation that allowed it to boost its occupancy rate from 42% to 70%.

Just four months later, Grupo Villar Mir put Torre Espacio up for sale, which the Philippine Group Emperador ended up buying for €558 million. By then, the skyscraper where PwC has its headquarters – the black tower that is also home to the Eurostars Hotel – had already changed hands, thanks to Merlin’s acquisition of Testa, and the sheikh Khadem al Qubaisi had already started putting the feelers out to sell Torre Cepsa, the skyscraper for which Amancio Ortega has offered to pay €490 million, according to El Confidencial.

Amidst this game of Monopoly being played out at the north of Paseo de la Castellana, two overseas financial entities, Mastercard and Commerzbank, have decided to transfer their offices to Torre de Cristal, the highest building in Spain, which measures 250m tall and contains 52 floors.

The credit card company has already moved into the skyscraper, whilst the German bank is currently undertaking refurbishment work ahead of its move before the end of the year.

But these two entities are not the only ones who have decided to move into the building owned by Mutua Madrileña. In recent months, following the arrival of KPMG with its 1,900 professionals, Torre de Cristial has seen a significant increase in the number of itstenants, after sealing several agreements with companies such as Red Hat, Cerner and Gesternova, which has allowed it to increase its occupancy rate to more than 82% and lease out a further 5,000 sqm.

Hardly any free floors left

The direct impact of the appetite for these skyscrapers from tenants and owners alike means that there are hardly any free floors left in the Cuatro Torres district (…).

Tower Sacyr (now owned by Merlin) is the only fully occupied tower, but it had to drastically reduce its rental prices to reach an agreement with PwC in 2011, during the worst years of the crisis, in order to acheive that.

Bankia also demanded that Cepsa occupy 100% of Torre Foster, but the oil company has now decided to put eight vacant floors up for rent. Those floors have a surface area of 13,000 sqm, a figure that is slightly higher than the 10,200 sqm that is also being marketed in Torre Espacio, the skyscraper where the main tenant is Grupo Villar Mir, which occupies half of the building.

These numbers show that the average occupancy figure for the Cuatro Torres district now exceeds 80%, a ratio that it has reached at a time when Azca, the traditional financial district in Madrid, is seeing a significant number of its properties undergo profound transformations.

The Cuatro Torres area will be further consolidated as a business centre with the upcoming construction of the so-called Fifth Tower, a skyscraper being developed by Grupo Villar Mir, in partnership with the fund Corestate, which Instituto de Empresa will occupy along with the health group Quirón, according to experts.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Amancio Ortega Offers €490M For Torre Cepsa

28 June 2016 – El Confidencial

Amancio Ortega has entered the bidding, through Pontegadea, to acquire Cepsa’s skyscraper, by placing an offer on the table worth €490 million, according to sources familiar with the operation.

The owner of Inditex is thereby setting himself up to undertake his largest operation in the country to date, in a deal that would rank well above the figure of €400 million that he paid for the iconic Torre Picasso, the building he acquired from Esther Koplowitz almost five years ago.

Then, like now, the businessman approached the operation without the need to request financing from the banks – he has a wealth that differentiates him from the other candidates and enables him to bid slightly below the other interested parties.

In addition to Pontegadea, two other funds have expressed their interest in putting €530 million on the table, according to sources. Clearly, those bids are higher than Ortega’s, but they are linked to certain financial and payment structures that are a long way from offering the guarantees that Pontegadea provides to all vendors.

The hunt

Thanks to his dividend from Inditex, the businessman receives an annual cheque amounting to €1,100 million, which he uses, almost entirely, to acquire properties. This policy has converted Pontegadea into one of the largest real estate owners in Spain, comparable only with the newly created Merlin-Metrovacesa and Colonial.

Nevertheless, the dimensions of this remuneration mean that it is becoming increasingly difficult for the second richest man in the world to find opportunities in Spain. His interests focus on operations with at least eight zeros in the price, and as a result he has multiplied the number of operations undertaken overseas in recent years. (…)

Despite his financial prowess and the increasing challenge of finding desirable properties, Pontegadea remains faithful to its conservative policy and avoids processes that involve increasing the price in the final stretch.

In fact, its offer for Cepsa falls a long way below the €550 million asking price that the Sheik Khadem al Qubaisi hopes to obtain. The Sheik owns the purchase option over the Madrilenian skyscraper and has until September to exercise it if he wants to stop Bankia from taking over the asset once again. (…).

Nevertheless, Pontegadea is remaining firm in its valuation of the building, a figure that, if they end up closing the operation, will be significantly lower than the €558 million paid by the Philippine Group Emperador to acquire Torre Espacio. Nevertheless, according to several experts in the sector, there are important differences between the two operations, not least the higher risk of having OHL as a tenant rather than Cepsa.

The 248 metre tall skyscraper, designed by Norman Foster, has a leasable surface area of 56,000 sqm, spread over 34 floors. The sale has sparked interest from large institutional investors, such as Invesco, AEW, Deka, Hines, Patrizia, Etoile Properties and Axa.

Original story: El Confidencial (by Ruth Ugalde)

Translation: Carmel Drake

Ipic Finalises Sale Of Torre Cepsa For €500M+

3 May 2016 – Expansión

Ipic, the Abu Dhabi state fund behind the oil company Cepsa, is trying the sell the so-called Torre Foster for a price that could range between €500 million and €600 million.

Ipic is negotiating with a small group of foreign funds, including, some investors from the Middle East. The operation will mark a milestone in the new boom that the real estate sector in Spain is currently experiencing and will serve to boost other projects currently on the horizon, such as the so-called fifth tower, which the businessman Juan Miguel Villar Mir wants to construct in the Cuatro Torres complex, where the Foster skyscraper is located.

That price is significantly higher than the figure of between €400 million and €450 million that the Torre Foster, now renamed Torre Cepsa, given that it houses the headquarters of the oil company, was valued at when Ipic signed a call option to purchase the building from Bankia back in 2013.

That option has not been exercised yet. It will be exercisable after the summer. Hence, Ipic has accelerated the negotiations to acquire the building and, almost immediately, sell it on to a third party. Technically, the property is still owned by Bankia.

Gain for Abu Dhabi

The additional value that Ipic obtains for the building, if it manages to sell it to a third party for more than the price established in the call option, will represent a gain for the fund, in other words, for the Government of the Arab Emirate of Abu Dhabi.

Ipic (International Petroleum Investment Company) operates as a sovereign fund for channelling investments in energy and other similar sectors by the Government of Abu Dhabi. The group owns assets amounting to USD 68,000 million and holds investments in around twenty companies, of which Cepsa is the largest.

Bankia’s agreement with Ipic seemed like a great deal for the bank at the time. Back then, in the midst of the hangover from the real estate crisis, the price established for the option to sell the building was very attractive. In addition, Ipic rented out the whole building to house Cepsa’s headquarters, although the oil company did not end up occupying all of the floors.

The tower has a surface area of more than 100,000 m2, of which around 72,312 m2 relates to above ground offices and a further 37,500 m2 corresponds to five underground floors.

The agreement between Bankia and Ipic included a lease contract for an extendable eight-year term. This long-term contract is another of the elements that will increase the value of the building in the event that Ipic ends up selling it to a third party. At the moment, Bankia charges Ipic a monthly rent of €1.6 million, through the company Torre Norte S.A.. Ipic pays for the rent through the company Muscari Development, B.V., which is domiciled in The Netherlands. That price includes discounts that end in June 2016. The lease contract includes the call option to buy the entire building. (…). The Ipic group began to evaluate options for selling the building at the end of last summer, following the collapse of the global oil prices. (…).

Original story: Expansión (by M.Á.Patiño and R.Arroyo)

Translation: Carmel Drake